Sunk cost in buildings
NRM3: Order of cost estimating and cost planning for building maintenance works, defines ‘sunk cost’ as:
‘… the cost of goods and services already incurred and/or irrevocably committed.’
As sunk costs have already happened, they are independent of any event that may occur in the future.
Sunk costs are often associated with buildings, as for many businesses, once built, they are in effect sunk costs.
Sunk costs can pose an important dilemma for the funders of building projects, if for example, circumstances change part way through a project. They may then need to weigh up how much they have already spent, against the potential consequences of either proceeding (and potentially throwing good money after bad) or cutting their losses and moving on.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Plumbing and heating systems in schools
New apprentice pay rates coming into effect in the new year
Addressing the impact of recent national minimum wage changes.
EBSSA support for the new industry competence structure
The Engineering and Building Services Skills Authority, in working group 2.
Notes from BSRIA Sustainable Futures briefing
From carbon down to the all important customer: Redefining Retrofit for Net Zero Living.
Principal Designer: A New Opportunity for Architects
ACA launches a Principal Designer Register for architects.
A new government plan for housing and nature recovery
Exploring a new housing and infrastructure nature recovery framework.
Leveraging technology to enhance prospects for students
A case study on the significance of the Autodesk Revit certification.
Fundamental Review of Building Regulations Guidance
Announced during commons debate on the Grenfell Inquiry Phase 2 report.
CIAT responds to the updated National Planning Policy Framework
With key changes in the revised NPPF outlined.
Councils and communities highlighted for delivery of common-sense housing in planning overhaul
As government follows up with mandatory housing targets.
CIOB photographic competition final images revealed
Art of Building produces stunning images for another year.
HSE prosecutes company for putting workers at risk
Roofing company fined and its director sentenced.
Strategic restructure to transform industry competence
EBSSA becomes part of a new industry competence structure.
Major overhaul of planning committees proposed by government
Planning decisions set to be fast-tracked to tackle the housing crisis.
Industry Competence Steering Group restructure
ICSG transitions to the Industry Competence Committee (ICC) under the Building Safety Regulator (BSR).
Principal Contractor Competency Certification Scheme
CIOB PCCCS competence framework for Principal Contractors.
The CIAT Principal Designer register
Issues explained via a series of FAQs.